Boeing Denied Bid for Tariffs on Canadian Jets

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A Bombardier CSeries plane in 2015. The Commerce Department had recommended that the United States impose duties of nearly 300 percent on Bombardier’s new CSeries, but the International Trade Commission decided to revoke them.CreditPascal Rossignol/Reuters

MONTREAL — The United States International Trade Commission on Friday struck down a Commerce Department recommendation that America place steep duties on imported Canadian jets, bringing an end to a trade dispute that has stoked tensions between normally close allies.

The case was brought by Boeing, which accused the Canadian jet maker Bombardier of subsidizing its products and selling them at unfairly low prices in the United States in violation of American trade rules. As is its usual practice, the commission did not explain the factors behind its decision.

The dispute — one of several trade conflicts to erupt between the two countries over lumber, newsprint and other goods — flared up amid wrangling over the Trump administration’s plan to drastically rework the 24-year-old North American Free Trade Agreement. The trade commission’s decision seemed likely to ease that strain.

The Commerce Department had decided that duties of nearly 300 percent should be placed on Bombardier’s new CSeries aircraft. But the trade commission, a quasi-judicial body of trade experts, disagreed.

In a statement, Bombardier described the decision as “a victory for innovation, competition, and the rule of law.” It added that it looked forward to delivering the CSeries plane to the American market.

Boeing, in its own statement, said it was disappointed and continued to experience “the effects of those unfair business practices in the market every day.”

The decision was greeted with relief at the Hotel Bonaventure in downtown Montreal, where negotiators were meeting to hammer out a compromise on renegotiating Nafta.

Speaking in the hotel’s lobby, Jerry Diaz, the president of Unifor, the Canadian union that represents Bombardier employees, called the decision “a huge victory for Canadian workers.”

He added that it left “a lot of unanswered questions,” including whether Bombardier would continue to pursue a new production line in Alabama, a partnership with Airbus that was announced in October, that might have helped the company avoid paying American duties.

In an emailed statement, Simon Letendre, a Bombardier spokesman, said the trade commission’s decision would not affect those plans.

In Quebec, the decision was met with equal shares of applause and relief. Bombardier, which grew from a tiny snowmobile making company into a global aerospace and transportation behemoth, is a large employer in the province and a source of pride and identity.

Karl Moore, an associate professor in the Desautels Faculty of Management school at McGill University, said if the decision had gone against Bombardier, American consumers would have been the true losers. “Boeing, Airbus, and Bombardier all get a lot of financial support,” he said. “It is the nature of the game.”

Canadian officials had feared the worst from the ruling, which capped a busy week of trade skirmishes between the United States and Canada.

On Monday, the Trump administration moved to place tariffs on imported solar cells and panels, ensnaring both Canada and Mexico. On Tuesday, Canada and 10 other nations in the Trans-Pacific Partnership announced that they would move forward with the trade pact, which the United States withdrew from after President Trump took office.

And on Wednesday, tensions mounted in Davos, Switzerland, where Wilbur Ross, the commerce secretary, accused Canada’s prime minister, Justin Trudeau, of using remarks at a forum about that partnership to put pressure on the United States in the Nafta negotiations.

The uneasy atmosphere between the longstanding allies had helped to elevate Boeing’s trade case — a conflict that in other times might be considered run-of-the-mill — into an international kerfuffle.

Trade lawyers emphasized that the case was hardly unique — in Mr. Trump’s first year in office, the Commerce Department considered 84 new cases that involving issues of dumping and subsidization — and one in which the White House had no official role.

Despite appeals to Mr. Trump by foreign leaders, Boeing’s case was decided entirely by independent career officials at the Commerce Department and trade commission. Boeing had described the conflict as a classic case of dumping and subsidization, and said its filing would have proceeded no matter who was president.

Still, the dispute had attracted the attention of world leaders including Prime Minister Theresa May of Britain, because the Bombardier jet is a major creator of jobs in her country as well as in Canada. On Thursday, Mrs. May once again raised the issue with Mr. Trump when she met with him on the sidelines at the World Economic Forum in Davos, her office said.

In a statement, Chrystia Freeland, Canada’s foreign minister, said the decision confirmed her country’s position that Boeing was not commercially threatened by Bombardier’s CSeries aircraft.

“Canada-United States trade is important to the prosperity of both our countries,” she said. “This decision will support well-paying middle-class jobs on both sides of the border.”

The issue spilled over into the Nafta talks, where the Trump administration has proposed a change that would make it harder for Canada to defend itself against the type of decision that the Commerce Department originally made in the Bombardier case.

The United States proposal would eliminate a Nafta provision known as Chapter 19 that allows Canada to appeal such decisions. The provision was a condition of Canada’s entry into its first trade deal with the United States, in 1988, and Canadian negotiators still describe it as a necessity.

Just a week ago, Canada used the provision to file a request for a panel of lawyers constituted under Nafta to review American duties on Bombardier, and to potentially overturn them. That appeal is no longer be needed.

A feeling of cautious optimism has pervaded the trade talks in Montreal this week. After a long stalemate, negotiators from Canada and Mexico have begun to respond to American proposals with their own ideas, giving the current round of negotiations at least a semblance of constructive discussion.

Nafta’s supporters have emphasized the long list of business leaders, representatives, governors and foreign officials who have visited Mr. Trump and others in his administration in recent weeks to promote the agreement’s benefits. The supporters say the meetings are having an impact on the president’s willingness to remain in the deal.

But some trade experts point out that the administration’s statements about sticking with the negotiations are inconsistent. “I don’t think anyone, not even a Louisiana fortune teller, can tell you what is the likely outcome,” said Carla Hills, a United States trade representative in the administration of President George H.W. Bush.

At Davos, Mr. Trump reiterated that the United States might terminate Nafta if the three countries could not reach what he considers a better deal. “I think we have a good chance,” he said, “but we’ll see what happens.”

A version of this article appears in print on , on Page A9 of the New York edition with the headline: Boeing Loses Its Bid For U.S. Tariffs on Jets Imported From Canada. Order Reprints | Today’s Paper | Subscribe